Co-operative Values, Institutions and Free Riding in Australia: Can it Learn from Canada?

Abstract

While there is a strong logic favouring cooperation, it faces a central problem: the 'free rider' or 'cheat'. Collectives find ways of promoting norms of solidarity, and seek regulation to prevent free riding. Around two fifths of Australian employees on collective agreements are free-riding non-members. Evidence suggests the recent growth of free riding does not signify the decline of cooperative values and the ascendancy of individualism. Rather, it reflects institutional changes. The Canadian solution to the cheating problem, the Rand formula, inspired Australian unions to introduce (excessive) 'agency fees' into collective agreements. They were eventually stopped by the state. Alternative models include 'social obligation fees' - provisions for employees covered by the agreement to make a contribution to a voluntary organisation of their choice.